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Senate Republicans move to cut $600 weekly jobless benefit by two-thirds

The emerging details represent a counteroffer to Democrats, who blasted the proposal and have pushed to extend the full $600 payment.
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WASHINGTON — Senate Republicans are moving to cut the expiring $600 weekly federal unemployment bonus to $200 a week in a new coronavirus aid package they released Monday.

The $200 flat benefit would last for about two months as states make the transition to a system that would grant unemployed people 70 percent of the wages they made before they lost their jobs.

"Our Democratic colleagues know this crisis is still urgent. I know they know American families need more help. So I hope this strong proposal will occasion a real response, not partisan cheap shots," Senate Majority Leader Mitch McConnell, R-Ky., said Monday as he announced some details of the plan.

He said it would include more than $105 billion for schools, liability protections for businesses and other entities that reopen, another round of direct payments for Americans and additional help for businesses under the Paycheck Protection Program.

But if the goal is to pass a bill, the Republican plan appeared to be off to a bad start. It will need the support of at least seven Democrats — and likely more, given that Republican senators expect significant defections.

Senate Minority Leader Chuck Schumer, D-N.Y., criticized Republicans for being "content to do almost nothing for three long months" and said they "just ran down the block and tossed an airball."

"Senate Republicans have presented us with a halfhearted, half-baked legislative proposal," he said on the floor. "In short, the Republican plan is too little, too late. The Republican plan is weak tea when our problems need a much stronger brew."

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In a stunning moment Monday, McConnell appeared unaware of certain provisions in the proposal, signaling more haggling to come among lawmakers and the White House over what it includes.

When asked on camera by NBC News why money for an FBI headquarters in Washington is in a COVID-19 bill, he looked surprised and said “I’m not sure that it is, is it?” A nearby aide then confirmed to McConnell it was in the proposal.

The bill includes $1.75 billion earmarked for the design and construction of the headquarters facility for the FBI in order to “prevent, prepare for, and respond to coronavirus, domestically or internationally.” McConnell later said it was a project from the Trump administration and would ask the White House why it needs that provision.

“In regard to that proposal, obviously we had to have an agreement with the administration in order to get started and they’ll have to answer the question on why they insisted on that provision,” McConnell said. “You'll have to ask them why they insisted that be included.”

The proposal, which comes during an intraparty clash over the next round of relief, is set to be Republicans' opening salvo in negotiations that have yet to begin with Democrats, who have passed an extension of the $600 payment in the House through January, as part of a $3.4 trillion package.

The Senate GOP plan would also include stimulus payments of up to $1,200 — the same policy as the CARES Act, but one would that allow $500 for dependents 17 years and older, who were previously excluded.

Unemployment benefit cutbacks

To mitigate concerns that a wage replacement structure would be too complicated to set up, the GOP plan would let states apply for waivers from the Labor Department to continue the flat jobless payments for up to two extra months if they could not meet the deadline to switch the formula.

"They can all do this transition, will just take some time, so we are giving them time," a Republican aide said.

Republicans widely oppose continuing the current jobless bonus, arguing that it provides a disincentive for jobless Americans to return to work. They cite a June 4 report by the nonpartisan Congressional Budget Office that the $600 a week would exceed the salaries that about 5 of every 6 recipients could expect if they were working during the next six months.

But some experts say cutting the benefit would lower household spending and hurt the economy.

Senate Democrats pointed to an analysis by economist Mark Zandi of Moody's Analytics, which projected that if the jobless bonus is cut to $200 a week, "nearly 1 million jobs will be lost by year's end, and unemployment will be 0.6 percentage point higher."

Sen. Ron Wyden of Oregon, the ranking Democrat on the Finance Committee, said the White House is "showing that it has zero understanding of the desperation of unemployed Americans."

"My message to Republicans is this: If you think $200 a week is enough to live on, you try it first," he said.

Michael Zona, a spokesman for Senate Finance Committee Chairman Chuck Grassley, R-Iowa, responded on Twitter: "To call this misleading would be generous. A federal benefit of $200/week would be *in addition to* hundreds in state benefits," he wrote. "No unemployed American is being asked to live on $200 a week."

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The issue comes with added urgency, as the $600 benefit is scheduled to expire Friday, with some states saying that, because of administrative reasons, the last payments will have gone out last weekend if the program is not extended. In addition, a federal moratorium on evictions ended last Friday.

House Speaker Nancy Pelosi, D-Calif., said it was past time to begin talks.

"I call upon the Republican leadership of the House and Senate and representatives of the President to come to the Speaker's Office and join Leader Schumer and me within a half an hour of releasing their plan today to negotiate and get the job done," she said in a statement Monday.

Later Monday, Pelosi and Schumer spoke to reporters after meeting with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows and said they were “somewhat frustrated” with where things stood.

“We have some other priorities that we want to see in a bill, but if they’re not even getting to the fundamentals of food, and rent and economic survival, they're not really ready to have a serious negotiation,” Pelosi said.

Mnuchin and Meadows said they would be back on the Hill on Tuesday for more talks with the Democrats.

One of the Senate Republican aides doubted that the Democratic-endorsed policy to pay some people more than their previous jobs did was "a sustainable position."

"We may not end up at $200, but no way a deal gets done at $600 or very close to it," the aide said.